US stocks took off last night – after a rough start – as the aviation giant Boeing reported better results.

The Dow Jones industrial index closed 42.99 points higher at 12,763.22.

Improved sales, reported by MacIntosh, also helped.

The tech heavy NASDAQ composite index rose 28.27 points to 2,405.21.

The S&P 500 also gained ground, rising 3.99 points to 1,379.93.

Boeing’s profits were better than expected.

And one optimistic analyst said the “panic phase” of the credit meltdown is “now over.”

The Australian dollar also enjoyed a brief triumph overnight, rising above 95US cents, before falling back to 94.90.

Oil futures also fell back overnight, but were still at $118.20, after coming within cents of $US120 a day earlier.

And that is worrying news, especially as Australia’s inflation rate hit 4.2 per cent yesterday, with price rises in all capital cities now well above the Reserve Bank’s target range of 2-3 per cent, over the course of a business cycle.

Normally, that would have the Reserve Bank board reaching for the interest rate button.

Yet, even though the price of a loaf of bread jumped by 9 per cent, over the past year, that may not happen this time.

That’s because the US credit crunch is doing the Reserve Bank’s job for it.

Early signs suggest that both business and consumer spending has fallen sharply over recent weeks.

And another rate rise, in present circumstances, would be dangerous.